The city of Denver has paid more than $6 million in rebates to the nation’s two largest concert promoters through a program meant to attract more shows to Red Rocks Amphitheatre and other city-owned venues.

But the city acknowledges it cannot say definitively that commissions paid to AEG Live and Live Nation Entertainment dating to 2007 are responsible for bringing in more concerts.

The number of events and attendance at Red Rocks jumped in the first year of the city’s Commercial Concert Event Commission Program, which pays a portion of rent back to promoters if they meet targets. Then bookings dipped for two years before starting to climb.

Red Rocks concerts staged by AEG Live — the dominant promoter in Denver — were flat for the first four years of the program, according to records the city provided in response to a Denver Post request. AEG bookings soared over the past two years after the economy improved and the city altered the formula for awarding the incentives.

The nation’s other concert promotion giant, Live Nation, brought fewer shows to Red Rocks in each of the past three years than it did in the first year of the promoter rebates.

Both city officials and industry insiders describe incentives for promoters as commonplace. But most are negotiated behind closed doors. The Denver rebate program, because it is run by a public agency, provides a rare look at the details of a mostly hidden practice in the competitive concert promotion business.

Kent Rice, executive director of the city’s Arts & Venues department, said he wondered initially why anyone would need an incentive to book at Red Rocks. But he said the record number of shows in recent years shows the program is successful and demonstrates “the more money the promoters make, the more shows they bring.”

“People may not believe it. They may think it’s easy to get people to play at Red Rocks, but it does take a little bit of work,” Rice said. “I think the program we have with the promoters is mutually beneficial for the city, the promoters, the fans and the musicians that perform there.”

The city has offered promoters incentives since about the mid-1980s, said Tad Bowman, who manages Red Rocks for Arts & Venues.

The most recent variation, which began in 2007, was adopted at a time of industry consolidation and as city officials were concerned about competition from the 4,500-seat City Lights Pavilion, Bowman said. That outdoor venue, on the Pepsi Center grounds, closed ahead of the Democratic National Convention in 2008.

“It’s a win-win”

City officials say the market remains competitive, pointing to the Pepsi Center, FirstBank Center in Broomfield, Dick’s Sporting Goods Park in Commerce City, Sports Authority Field at Mile High and Fiddler’s Green Amphitheatre in Greenwood Village.

The city program initially offered promoters a flat 50 percent rebate if they booked at least 10 qualifying events per year at Red Rocks.

The current formula, in place since 2010, puts a premium on high volume. Promoters can receive rebates of between 40 percent and 60 percent of their rents through the program. The more shows a promoter books, the higher the potential return.

City officials also have raised the bar since 2010 on the number of shows promoters must book to get the more generous refunds.

All participating promoters must enter into contracts each year that are approved by the City Council and the mayor’s office.

Of the $8.4 million that AEG Live paid in rent to stage shows at Red Rocks between 2007 and 2013, the city refunded about $4 million through the program, records show.

During that period, the city said it brought in $38.4 million in fees from rent, food and beverage, parking and admissions taxes from AEG Live-promoted events at the legendary foothills venue in Morrison.

The arm of Anschutz Entertainment Group brought 59 concerts to Red Rocks this year — and received a rebate of nearly $1 million.

Veteran Denver promoter Chuck Morris, president and CEO of AEG Live Rocky Mountains, said the incentive program has been a huge success for the city and reduces risk for promoters.

“To me, this is a no-brainer,” Morris said. “This gives promoters an incentive to come to the greatest amphitheatre in the world — but also one of the most expensive. It’s a win-win.”

Morris said AEG Live would bring fewer shows to Red Rocks without the program. Without the city incentives, the promoter would break even or lose money on an act that draws 5,000 or 6,000 to the 9,450-seat venue, he said.

“In our business, without incentives, it’s hard to make money at the door,” he said. “The bands, they demand most of it. Unless you can get incentives, it’s really hard to go to any building you don’t own.”

Live Nation paid about $4.5 million in rent from 2007 to 2013 for shows at Red Rocks and received nearly $2 million back through the program, records show. The city says Live Nation concerts brought in $20 million in revenue during that period.

Live Nation spokeswoman Jacqueline Peterson said she was unfamiliar with the Denver program but supported the practice.

“Promoters put out large amounts of cash for an artist to put on a tour,” she said. “It sounds like this is getting Live Nation or any promoter booking into Red Rocks paid for acts they are bringing there.”

The city also offers incentives to book at the Denver Coliseum and Denver Center for the Performing Arts, but almost all the rebates to AEG Live and Live Nation involve Red Rocks concerts.

AEG Live also has received about $73,000 in rebates for events at the performing arts complex, city records show.

Bowman, of Arts & Venues, said the city is looking for the total value of bringing in more shows. If the city brings in more revenue through stronger food and beverage sales, he said, it makes sense to share some of the rent back with the promoter putting on the shows.

For the three years before the 2007 incentive program was put in place, Red Rocks on average hosted 60 events a year that drew an average annual attendance of 360,479, records show. After the rebates to AEG Live and Live Nation began, the venue in 2007 hosted 81 events that drew 542,639.

Bookings and attendance then flattened for two years before rebounding, then skyrocketed over the past two.

“Part art, part science”

Bowman said the commission program is effective, even if the city cannot draw a direct correlation between the rebates and booking trends.

“It’s sort of like anything you do — it’s part art, part science,” he said. “You look at the numbers for a period of time and realize you’re doing good, successful business.”

He said other factors probably contributed to the uptick in shows, including overall pricing policies, the natural beauty and a shift in the music industry that puts even greater importance on touring as artists struggle to make money from record sales.

While there’s an allure to booking at Red Rocks, the rental rates are higher than others in the market, Bowman said.

Brian Kitts, a spokesman for Arts & Venues, said the program took time to take hold, as is often the case with new initiatives.

“When you talk to promoters … , there are other options in Denver and in other cities,” Kitts said. “I think anything that the city does or that Red Rocks does to be competitive with Pepsi Center or FirstBank Center or Fiddler’s Green, you have to do those things.”

Both city officials and promoters say incentive programs are commonplace in the concert industry.

Morris, of AEG Live, said “there are other arenas in this town” that offer incentives, but he declined to identify them.

“Almost every building I know of has some sort of incentive program,” he said.

Privately held Kroenke Sports and Entertainment, which owns and operates the Pepsi Center, declined comment on its practices.

The Post could not identify other examples of local governments or quasi-governmental agencies offering similar incentives.

Sports Authority Field at Mile High, which is owned by the Metropolitan Football Stadium District, does not offer a rebate program, according to the stadium operator.

The owner of FirstBank Center, the Broomfield Urban Renewal Authority, does not offer rebates, a spokeswoman said.

The Broomfield arena is run by a joint venture of AEG Live and Kroenke Sports and Entertainment. Morris said promoters are offered incentives to book there but declined to give details.

Richard Barnet, a professor at Middle Tennessee State University and co-author of a book on concert promotion and touring, criticized promotional rebate programs for benefiting big promoters to the detriment of independent operators.

“From a business standpoint, I think it makes sense,” Barnet said. “If I am getting that kind of kickback — they hate calling it that, but that’s exactly what it is — I am going to try to put as many strong shows in there as possible.”

Denver independent promoter Bill Bass said he generally does not stage enough shows at Red Rocks to qualify for the program. This year, however, Bill Bass Concerts staged just enough — five — and received a $49,491 rebate on $123,729 in rental payments, city records show.

Bass said he has no problem with the program. Bass has partnered with AEG Live in the past, including working together on a reggae festival at Red Rocks.

“I don’t resent it if the people who get the rebates are the people who are doing a lot of shows,” Bass said. “Why would anyone have a problem with an incentive program? You have to earn it.”

Denver City Councilwoman Jeannie Faatz said she has wondered whether the caliber and number of Red Rocks shows would change without the incentive program. But, she said, “you have to place your faith in the people who know the industry and what they advise you.”

Faatz noted that Arts & Venues is self-sustaining and no longer relies on $1 million a year in general fund money, which she said is an indicator of success.

“I have gotten the feeling that on balance, the promoters obviously have made a profit on this,” she said. “But we have done well, too.”

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